Saturday, November 5, 2016

More clueless bankers

Bloomberg: Inside Hong Kong’s posh American Club, few worked a room quite like Avery Stone.Over steak dinners and cigars, Stone charmed a Who’s Who of financiers into investing millions in his fledgling business. Then, earlier this year, everything unraveled--and he vanished.Left behind are the questions, including the big one: How did Stone and his partners at Global Merchant Funding Ltd. apparently dupe Hong Kong’s princes of finance into believing their business was on solid-footing? Accountants are still trying to piece together the answers."This isn’t a deal that went bad, these guys systematically preyed off their friends,” said Thomas Gallagher, one of GMF’s investors, who had set up Citigroup Inc.’s fixed-income prime brokerage in Asia and now works for a hedge fund services firm. “The fact of the matter is, these guys essentially were in our circle.”For many, the money in question -- $32.5 million, a pittance by Wall Street standards -- is far less astounding than whose money it is.Documents related to the liquidation of Stone’s company show that many of its investors were drawn from prominent international banks. For them, weighing financial risks is crucial to their day-to-day jobs. In this case, they didn’t see the danger until it was too late.Creditors ListAmong those on a list of more than 80 creditors seen by Bloomberg News are Morgan Stanley’s co-chief executive officer for Asia excluding Japan, Gokul Laroia; Martin Wong, now chief integrity officer at a U.S. software startup for online lenders and previously chief administrative officer and general counsel for the Asia-Pacific region at Citigroup; and Peter Tattersall, chief operating officer for fixed-income sales in Asia with Morgan Stanley, a role that involves responsibility for auditing and for implementing regulations.

Not in the new system. By the time dumshit bankers finish lunch, some kid will have written the pit boss code to steal their deal. They will never be ale to skip 'mark to market' again.